Do you want a refund on your child care expenses?
The Child and Dependent Care Credit is a credit given to taxpayers who have to spend their money on taking care of their children. It can involve a variety of things, but the main reason why you may want to claim this credit is to cover the cost of child care.
We are going to go through the rules revolving around this tax credit and how much it’s worth.
How Much is the Child Care Credit Amount?
The amount you can get as part of your credit is determined by factors like your income and the number of children in your family.
Thankfully, it’s relatively easy to understand because you can deduct a maximum of $3,000 for expenses if you have one child and $6,000 for more than one child.
The higher your income the lower your credit. Unlike other credits, though, there’s no upper income limit. Therefore, you can always claim at least some of the credit, no matter how high your income is.
Try the Child Care Credit Calculator
Do you want to find out how much a child care credit could be worth to you?
Use our calculator. All you must do is answer some basic questions about how many children you have and how much you earn per year.
The calculator will automatically tell you exactly how much you may be entitled to.
Child Care Credit Age Limit
There are age limits regarding whether a child is eligible to be claimed for the purposes of the tax credit. The age limit is for children age 13 or younger at the end of the year. They can be claimed as a dependent on your tax return.
It’s also possible to claim for your spouse if they have lived at home for at least six months of the year and they are unable to care for themselves. This also applies to anyone else in your household who would qualify as a dependent for tax purposes.
Child Care Credit Income Limit
There is no income limit for claiming the child care credit. It’s a universal credit that everyone can take advantage of.
The more you earn the less you get. The lowest earners will be able to claim back 35% of their total expenses, minus any employer provided expenses.
Those at the higher end of the spectrum will be able to get 20% of the cost of childcare back.
Child Care Credit Phase Out
The point where the child care credit begins to phase out has been increased due to the recent overhaul in tax laws. From 2018, the point where the child care credit will be phased out will be $200,000. For joint filers, this goes up to $400,000, so most Americans won’t need to worry about not getting the maximum amount possible.
For every $1,000 above this limit, the credit phases out by $50. So only richer Americans will see their credit reduced.
How to Calculate Your Child Care Credit Entitlement Today
You can find out how much you’re entitled to by using our calculator. This handy calculator will help you to find out how much you may be entitled to in seconds. If you have the relevant information about your financial affairs, you should have no problems finding out about your entitlement fast.
Then you can file your taxes with TurboTax. You’ll get an accurate tax form to submit to the IRS and you can do it within minutes.
Are you ready to find out how much you’re entitled to?